Visa Improves Payment Card Fraud Detection Technology

Visa (V) on Wednesday unveiled a series of improvements to its payment fraud detection system that boosts the ability of its network to detect potential electronic payments fraud.

The global payments technology company says the enhancements to Visa's Advanced Authorization, or VAA, give financial institutions reliable information on which transactions to decline in real time. Visa says this potentially reduces fraud by billions per year, while more confidently approving legitimate transactions to remove friction from payments for merchants and consumers alike.

"Cardholders, merchants and issuers all want to have confidence in the convenience and the security of every Visa transaction," said Mark Nelsen, who heads risk and authentication products for Visa. "The great improvements we've made in Advanced Authorization this year were designed to do just that: fight fraud and its costs to financial institutions and merchants, while also ensuring legitimate transactions are handled with the speed and convenience that consumers and merchants want."

Visa says it's expanded each account profile in its VAA model by adding more transactional history data, along with additional neural networks to analyze that data.

The account profile is a major component of the risk score assigned to a given transaction and provided to the issuer for them to make an authorization decision. The company says the upshot is improvement of as much as 130% in detecting fraud in debit transactions and 175% for credit transactions.

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03/20/2015 04:28 PM ET

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